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Brown trustee is mum on pay

David Cannon (right), a former James Brown trustee, looks at documents from attorney Louis Levensen as he testifies in Bamberg, S.C.

AIKEN --- One of James Brown's trusted advisers was threatened with contempt of court Thursday for what he said about his involvement in the late singer's finances -- and for what he refused to say.

During six hours of testimony in a Bamberg County courtroom, David Cannon repeatedly refused to answer questions about how much money he earned while working for Mr. Brown, invoking his Fifth Amendment right not to incriminate himself.

Mr. Cannon's attorney said the former estate trustee -- who was forced to resign in August amid allegations that he misappropriated at least $7 million of the singer's money -- is the subject of an Internal Revenue Service audit and could not discuss his income.

There were also hints Thursday that a criminal investigation into the financial dealings is either under way or will be launched.

Under blistering questioning from Atlanta attorney Louis Levenson, who represents several of the singer's children and grandchildren, Mr. Cannon said he did not have the financial resources to fork over $373,000 he was ordered to pay by Judge Jack Early in September.

Income tax records introduced in court, though, showed that he earned at least $5 million from 2000 to 2006, and he testified that he paid a Honduras contractor $866,000 in the past three months to build his retirement home there.

Thursday's court hearing focused mostly on Mr. Brown's wealth -- and where it might have all gone. Judge Early said it even shocked him.

"Mr. Cannon, what happened to all this money?" Mr. Levenson asked.

The lengthy hearing led Judge Early to threaten Mr. Cannon that he was "treading on very, very thin ice" and to warn him that the maximum punishment for contempt of court was six months in jail.

"I've been very shocked today by what's been going on, and I'm getting ready to not be nice," Judge Early said.

Thursday's hearing was the first since Mr. Brown's death last Christmas in which the state of his finances was fleshed out.

Attorneys involved in the case have already discovered what they say are suspicious withdrawals and have lodged complaints against Mr. Cannon, who managed the singer's business affairs.

In 1999, Mr. Brown borrowed $21 million against the future earnings of his music. Now attorneys for his children and the court have been investigating his finances because they don't know where it all went.

They accuse Mr. Cannon in court papers of hampering their efforts by not handing over financial records as ordered by the court.

When he wasn't invoking the Fifth Amendment, Mr. Cannon disputed allegations that he was responsible for taking the money.

He denied being paid $4.9 million in 1999 as a commission on the royalties bond. Mr. Levenson quickly contradicted that claim with Mr. Cannon's own words from a 2002 deposition in which the former trustee said he did receive such a payment.

Mr. Cannon said he cannot hand over his 1999 tax returns as Judge Early ordered because they cannot be found. He has requested them from the IRS, he said.

Mr. Cannon admitted that he had paid the Honduras contractor -- whose name he couldn't recall -- the entire amount for the retirement home after he had been removed as trustee and that he had no idea how much work had been completed. He said the money was his wife's, gained through the sale of property.

"This is hard for me to fathom," Judge Early said.

"You just sent them the full load and you'll come when it's finished?"

He ordered Mr. Cannon to provide a complete list of his assets -- including property, furniture, automobiles and jewelry -- within 10 days.

The day's often contentious testimony also raised Judge Early's ire, especially when he learned that Mr. Cannon and two other former estate employees filed amended tax returns for the singer's company, James Brown Enterprises Inc., after all three were removed and ordered to keep their hands off estate business.

Mr. Cannon said he did it because of a looming deadline to correct a tax mistake that could have cost the estate $39 million, testimony that was disputed by the accountant, Phillip Farr, who said that was inaccurate.

Judge Early told Mr. Cannon he was out of line and in violation of his court order to no longer do any work for the estate.

"I'd rather take the heat for doing it rather than not doing it," Mr. Cannon told him.

"You're going to take the heat, I promise you," Judge Early shot back.

No punishment was meted out, however. The hearing is scheduled to continue Tuesday.